The Islamic State group (IS) claimed the attack, the deadliest to hit Pakistan so far in 2017, in the town of Sehwan in Sindh province, some 200 kilometres (124 miles) northeast of the provincial capital Karachi.
A police source said a suicide bomber entered the shrine of Lal Shahbaz Qalandar, a 13th century Muslim saint, and blew himself up among hundreds of devotees.
The centuries-old shrine, one of the most revered in Pakistan, had been crowded on a Thursday, considered a sacred day for prayers.
Provincial health minister Sikandar Ali Mandhro said at least 70 people had died while 250 were wounded, 40 of them critically.
Images of the shrine showed blood smeared on the white floor around the grave, with debris and shoes scattered around.
Survivors and local residents, many in tears, were helping the blood-soaked wounded on to stretchers, while at Sehwan's overcrowded medical facility the injured were being treated on floors and in corridors.
Emergency services are basic in Sehwan, with the nearest main hospital some 130 kilometres away.
"Many wounded people are in critical condition and they will be shifted to Karachi as soon as Navy helicopters and C-130 plane reach nearest airport," Inspector General of Police for Sindh province A.D. Khawaja told AFP.
Pakistan's Prime Minister Nawaz Sharif said an attack on Sufis was considered a "direct threat", while military chief General Qamer Javed Bajwa warned: "Each drop of (the) nation's blood shall be revenged, and revenged immediately. No more restraint for anyone."
Sufism, a mystic Islamic order that believes in living saints, worships through music and is viewed as heretical by some hardline groups.
The IS group has targeted Sufi shrines in Pakistan previously, killing more than 50 in a bomb blast at the Shah Noorani shrine in Balochistan province in November last year.
Analysts have said IS is still scrabbling for purchase in Pakistan despite several high-profile attacks, and officials claim it is on the retreat in neighbouring Afghanistan.
Four suicide bombers struck northwest Pakistan on Wednesday, killing six people and unnerving civilians further.
"The past few days have been hard, and my heart is with the victims. But we can't let these events divide us, or scare us," Sharif said in his statement.
"We have faced tougher circumstances, and still persevered."
The attacks underscore Pakistan's struggle to stamp out extremism, which was stepped up after the country's deadliest ever attack, a Pakistani Taliban assault on a school in Peshawar in 2014 which left more than 150 people dead, mostly children.